A cart-man finds Swami and takes him to the forest officer. Rajam's team loses the match and Swami is blamed for it. Swami learns that Rajam will leave Malgudi the next day, following his father's transfer.
Swami and Friends revolves around the Life of Ten years Old Swaminathan or Swami as he is known. Swami portrays the growing pangs of a boy who despises school as he makes excuses and roams around Malgudi with his friends.